The Central Electricity Regulatory Commission aims to boost pumped storage project revenues by allowing them to sell power in the High Price Day-Ahead Market. While this move seeks to improve project returns, major players like Torrent Power continue to face execution hurdles, with its 3,000 MW Maharashtra project currently halted due to local protests.
The Central Electricity Regulatory Commission has introduced a draft proposal to permit Pumped Storage Projects to sell electricity in the High Price Day-Ahead Market. This regulatory shift is designed to improve the economics of long-duration energy storage. Under the current conventional market rules, pricing is capped at ₹10 per kWh, but the proposed change could allow operators to access prices of up to ₹20 per kWh, potentially shortening the timeline for recovering heavy initial capital spending.
While the regulatory support is intended to attract more investment into the sector, the ground reality remains challenging for developers. Pumped storage requires specific terrain, often including elevation differences and large reservoirs, which frequently place project sites in sensitive or forested regions. This geography often leads to complex hurdles regarding land acquisition and environmental clearances.
Torrent Power Conflict in Maharashtra
Torrent Power’s 3,000 MW Saidongar-1 project in Maharashtra serves as a clear example of the difficulties companies face despite having government support. With an estimated project cost of ₹15,000 crore, the site is recognized as a key asset for the national power grid. However, the project has faced significant operational delays due to local opposition and environmental concerns regarding the removal of forest cover.
Torrent Power stated that it obtained all necessary environmental clearances by January 2026 after regulatory review. To address local concerns, the company has pledged to plant 60,000 trees to replace the 48,000 trees slated for removal, along with carrying out compensatory afforestation on land transferred to the Forest Department. Despite these mitigation efforts, the project remains a focal point for local activists and political figures, leading to temporary halts in site preparation work.
Sector Execution Hurdles
The gap between ambition and implementation in the Indian pumped storage sector is substantial. Data indicates that while India possesses an estimated 290 GW of potential, only 7.43 GW is currently operational, with an additional 15.87 GW in the project pipeline. The experience of developers like Torrent Power highlights that even with improved financial incentives, successful execution depends heavily on managing land-use and environmental compliance.
For investors, the key monitorable remains the ability of companies to manage these on-ground execution risks. While the regulatory shift to the High Price Day-Ahead Market can theoretically boost profit margins, the actual financial impact will depend on whether developers can resolve land and environmental disputes to meet project timelines.